Gen Z Investors Flock to ETFs in Cryptocurrency Market

Gen Z investors are entering the cryptocurrency market in a big way, according to a report by pseudonymous market player Ali Charts. The research shows that 22% of their direct-equity accounts have only ever bought (never sold) and they have high net-buyer rates across tokenized stocks, direct equities, and TradFi perpetuals.

Their approach is measured compared to typical high-turnover trading, with an average of just 13 TradFi-perpetual trades, 8 direct-equity trades, and 3 tokenized-stock trades per month. This suggests that Gen Z investors are taking a long-term view rather than chasing quick profits.

The research also found that their risk appetite is more restrained than Millennials', as they use leveraged and inverse products less frequently across all covered investment products. Furthermore, ETFs have become their preferred vehicle, with unleveraged ETFs rising to 21.9% of their net equity inflows in July.

The report noted that ETF-linked perpetuals are emerging as one of the fastest-growing trading categories, with cumulative volume surpassing $116 billion and accounting for 19% of all TradFi perpetual volume in July. The most heavily traded ETF perpetuals include SOXL, KORU, EWY, QQQ, and SPY.